Advertise with fastmoving.co.za
 
 

Hedging policy helps AVI grow earnings
Hedging policy helps AVI grow earnings

Hedging policy helps AVI grow earnings

MARKETING NEWS

bdlive.co.za - Mar 14th 2016, 09:46

Diversified consumer brands company AVI is looking beyond the economic slump, and has almost tripled its war chest by raising its debt facilities to R1.5bn. 

"The reality is we run our business for the long term," AVI CEO Simon Crutchley said on Monday, after delivering the group’s interim earnings report. After spending about R451m in the first half, which was mainly directed to replacing vessels for its fishing business I&J, AVI will spend a further R500m on improving the capacity of its biscuit line, rolling out new stores in its retail division, and on expanding its global operations in the rest of the continent.

Money will also be directed to installing back-up power systems, and the group said it would also look at finding alternatives to water supply. "Each project would have been tested for a medium-term scenario for efficiency and capacity reasons," Mr Crutchley said.

In the six months to December, AVI increased headline earnings per share, the main measure of profit growth in SA, 11.3% to R28.16. The increase was driven mainly by the group’s hedging policy, which protected profits from currency movements and commodity prices, as well as higher selling prices across all product categories.

Operating profit at I&J soared 62.8% on the weak rand and low fuel price.

Ron Klipin, analyst at Cratos Wealth said the group’s return on capital of almost 30% justified the high levels of debt, which resulted in finance costs jumping 85% to R60.4m.

Chris Gilmour, analyst at Absa Wealth and Investments said the bank might buy AVI shares because of the defensive nature it derived from operating in all consumer segments.From DFM Publishers (Pty) Ltd 

Read more about: south africa | i&j | avi |

Related News

Health innovation is an opportunity for South African brands across multiple industries
23/09/2019 - 14:22
With government striving to pass legislation to create a National Health Insurance (NHI) scheme to serve all South Africans, the country’s health and wellness market is in flux. Along with the global trends reshaping the sector, this is a recipe for massive change and disruption that could have wide implications for consumer brands in every segment.

Multi-million rand Rustenburg Mall underway
09/09/2019 - 11:07
Rustenburg shoppers can look forward to a brand new shopping centre – Rustenburg Mall – set to introduce its first phase in April 2021.

AVI earnings slip as consumer spending remains constrained
09/09/2019 - 09:33
Consumer goods group AVI, whose brands include footwear retailer Spitz and Five Roses tea, trimmed its final dividend 4% in the year to end-June as it continued to feel the pinch from a constrained consumer environment.

Introducing the Cape Fine and Rare Wine Auction
23/08/2019 - 10:07
With the world market increasingly focused on the fine and rare wines from South Africa, the Cape Winelands is in a stronger position than ever to showcase its fine wine investments. This year, the Cape Winelands is proud to host its first-ever Cape Fine & Rare Wine Auction, an evolution of the historic Nederburg Auction in 1975.

Boost for SA's economy as China lifts its beef ban
07/08/2019 - 09:10
Within one month of the meeting between President Cyril Ramaphosa and President Xi Jinping at the G20, China has announced that it is lifting the ban on South African beef exports to China. This will be a major boost to South Africa’s economy given that China is the largest consuming market for South African beef and related products.